Daily Wrap
DJIA +19.66 (+0.14%) to 14,567.17; S&P 500 +7.25 (+0.47%) to 1,562.50; NASDAQ +29.61 (+1.06%) to 2,810.07
Monday’s action started with a gap higher which was promptly sold until just before 11am EST when the S&P 500 finally bottomed and then rallied the majority of the day. The high for the day was set just before 3pm EST and the remainder of the day was spent consolidating with a slightly lower bias. In economic data we saw a slightly downbeat housing (existing sales) number coming in at 4.92M vs a 5.02M estimate.
Caterpillar (CAT) announced earnings that seemed to be overall disappointing with a miss on current quarter revenues and EPS. To make matters worse CAT also provided full year 2013 estimates, both revenue ($57-61B) and EPS ($7), below previously provided guidance. Amidst that report, CAT gained 2.38% on the day which might be more the realization that CAT is over 22% off the 52 week highs. I like how CAT acted today and could be a name to watch for a potential long.
A big name in tech gained over 3.5% as SNBC’s David Faber announced hedge fund ValueAct increased their holdings in Microsoft (MSFT)
Merger Monday was in affect today as two names announced deals and both at very nice premiums to Friday’s close. First, ower-One (PWER) agreed to be acquired by ABB (ABB) for $6.35 per share in cash which represents a 56.68% premium to Friday’s close. Second, Met-Pro (MPR) agreed to be acquired by CECO Environmental (CECE) for a cash and stock deal valued at $13.75 per share which represents a 39.37% premium to Friday’s close.
The following noteworthy companies are scheduled to report earnings before tomorrow’s open: UTX, DD, TRV, LMT, ITW, RAI, JCI, APD, PCAR, PNR, IR, COH, DAL, RF, XRX
In analyst notes today, the much maligned Apple Computers (AAPL) received two upgrades today with price targets of $600 and $500. Also receiving an upgrade, Guggenheim went to a Buy rating on First Niagara (FNFG). On the downside Argus went to a Sell on Baker Hughes (BHI). Some of these and other upgrades and downgrades for the day can be found each morning when I post my 9 @ 9 in the Upgrades/Downgrades section.
Today’s high in the S&P 500 reached my initial level to watch as resistance on the S&P 500, $1565, with the entire resistance zone to watch as $1565-1575. The intraday charts do not have any negative divergence and looks like we could test the higher end of the range. On the bullish side I would want to see $1560 and $1555 hold in the S&P 500 cash index as support, otherwise it wouldn’t negate upside potential but might muddy the picture. Also note the potential Head & Shoulder pattern which if it plays out could count down to $1480.
